INTERNATIONAL ENERGY AGENCY UNDERLINES COAL AND URANIUM OUTLOOK

The International Energy Agency’s 2014 World Energy Outlook underlines the fundamental role Australian coal and uranium will play in meeting the world’s accelerating energy demand. 

The IEA expects global demand for energy to increase 37 per cent by 2040. By that date, the mix of the world’s primary energy supply is expected to be divided into four almost-equal parts: oil, gas, coal and low-carbon sources which include uranium-fuelled nuclear energy. 

The story for Australian coal is unambiguously positive. The IEA predicts that Australia will regain its ranking as the world’s top coal exporter by 2030. The global coal trade will grow by 40 per cent by 2040, with high quality Australian coal securing an impressive 40 per cent of that growth. The forecasts completely undermine activists’ claims that coal risks becoming a ‘stranded asset’. The claims of the ‘peak coal’ crowd led by The Greens are in tatters. 

This demand growth will be driven by Australia’s neighbours in the Asian region: 

  • China’s coal capacity will increase by 420 GW by 2040 – 40 per cent more than the entire existing US coal generation capacity.
  • India will become the world’s largest coal importer by 2025, with imports trebling by 2040. 
  • Coal demand in South East Asia will quadruple by 2040, with coal use overtaking the USA. 
  • Coal demand will also grow in Africa, Latin America and Eastern Europe. 

A large share of the increased coal generation in China, India and developing Asia will be modern ‘supercritical and ultrasupercritical’ coal generation which slash CO2 emissions by up to 40 per cent and achieve near-zero emissions of other pollutants. 

The outlook for uranium is also strong, with use expected to grow 90 per cent by 2040. The number of nations using uranium for nuclear energy generation will grow from 31 to 36 and there will be strong growth in existing nuclear-nations China, India, Korea and Russia. 

The IEA expects a uranium supply gap to open after 2020 as production at existing facilities declines and demand increases. Consequently the outlook is positive for a recovery in prices and expanded Australian production and exports over the medium term. 

The strong outlook for Australian energy exports over the medium term means jobs, economic growth and revenue growth for federal and state governments across Australia.

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